Impact of the President's Budget on North Dakota

Dear Friend, Earlier this week the President released his budget for Fiscal Year 2009. The $3.1 trillion package outlines spending on government programs for next year. Unfortunately, the real price tag is even higher. After accounting for costs the President leaves out of his budget -- such as Iraq war costs and fixing the Alternative Minimum Tax -- the federal debt will soar to $13.3 trillion by the end of 2013. In addition, the President spends $51 billion next year to provide tax cuts to millionaires while at the same time proposing a long list of cuts in programs that will hit every day working families. Once again, the President has produced a budget with a set of priorities that are not the priorities of North Dakotans. It will hurt rural America and short-change working Americans. As Chairman of the Senate Budget Committee, I vigorously oppose the President's misguided budget and pledge to work to restore funding to many of the programs critical to North Dakota and the nation. Sincerely, KENT CONRAD United States Senate The Impact of the President's budget on North Dakota: Agriculture The President's budget does not provide sufficient funding to write a Farm Bill, only $2.5 billion in new funding over five years. The White House also proposes to eliminate the Grand Forks Human Nutrition Research Center, just a year after it proposed a $1.15 million increase for obesity research funding for the Center. The budget also eliminates the Commodity Supplemental Food Program, which will affect low income seniors in North Dakota. Defense The President's budget includes strong funding for both the Predator and Global Hawk, two major UAV programs to be based in North Dakota. There is more than $1 billion set aside for Global Hawk which will allow for modifications on existing aircraft as well as the procurement of five new aircraft. In addition, there is funding for the procurement of 38 new Predators (up from 24 last year). This strong funding will help to ensure a quick expansion of the new UAV missions at Grand Forks Air Force Base. The President's budget only includes funding for 56 B-52 bombers, instead of the 76 required by law. However, the budget does continue to fund the modernization of the current force with $41.7 million in modifications (versus $18.1 million requested last year) and an additional $38.6 million for further research and development on new B-52 capabilities. Congress has passed my legislation blocking the reduction of the B-52 fleet below 76 active aircraft. Finally, the budget includes nearly $900 million for advance procurement of the KC-X, the next generation of air refueling tankers, with the first few aircraft to be purchased in fiscal year 2010. The Grand Forks Air Force Base is home to the 319th Air Refueling Wing, which flies and maintains 38 KC-135 Stratotankers. Economic Development The President's budget cuts the Small Business Administration's Disaster Loan program to $738 million from $887 million. Disaster funding for small businesses is critical to places like Northwood where unforeseen natural disasters require federal assistance for recovery. The President's budget proposal slashes funding for the Manufacturing Extension Partnership (MEP) program from $91 million in FY08 to $4 million in FY09. The manufacturing sector served by North Dakota's MEP provides 9 percent of the state's GDP and one-third of its economic growth. Education The budget eliminates funding for 48 elementary, secondary, and post secondary education programs, including Even Start, Career and Technical Education State Grants, Education Technology, and physical education programs. Grants for Safe and Drug Free Schools would be cut by nearly $195 million. In addition, 21st Century Community Learning Centers would be cut by nearly $300 million. The President's budget increases the Pell Grant maximum for college students to $4,800 in FY09. However, it eliminates other student aid such as Federal Supplemental Educational Opportunity Grants and Perkins Loans. Energy This President's budget proposal includes $85 million for the Clean Coal Power Initiative (CCPI), a 21 percent increase from the FY08 appropriated level. This funding increase could benefit power companies in North Dakota that are interested in capturing the carbon dioxide from the use of coal. The White House proposes a 17 percent cut to the Low Income Home Energy Assistance Program. In 2007, North Dakota utilized more than $20 million in LIHEAP funding and served 18,800 households. The President's budget also includes a 42 percent cut to the Rural Utilities Service (RUS) Electric Loan Program. In FY07, North Dakota received $227.9 million in RUS electric loans. The White House also plans to eliminate funding for the Weatherization Assistance Program (WAP). In 2006, WAP served 711 low-income households in North Dakota. Health The President's budget slashes funding for rural health, proposing an 86 percent cut. The Health Outreach Grant Program, which has provided $10 million to 20 Outreach networks in North Dakota since 1991, is completely eliminated. The FLEX Program is also eliminated - it has provided $3.3 million to North Dakota's Critical Access Hospitals since 1999. Finally, the Rural and Community Access to Emergency Devices program is eliminated. This program has placed more than 441 devices in 130 North Dakota communities. The budget also calls for $186.3 billion in Medicare cuts over the next five years. North Dakota's hospitals stand to lose more than $50 million over five years. Hospice providers could lose more than $5 million over five years. The state's nursing homes would be cut by more than $40 million over the next five years. For home health agencies, the proposed payment freeze will mean more than $7 million in cuts for North Dakota providers over five years. Homeland Security The President's Budget decreases state homeland security funding to $200 million from last year's appropriated level of $890 million. Housing The White House cuts Community Development Block Grants by 18 percent. In 2006, CDBG funded 54 housing rehabilitation, public facilities, and economic development projects in North Dakota. Indian Affairs For the seventh straight year, the President proposes zeroing out funding for United Tribes Technical College. Justice The President's Budget changes the Byrne /Justice Assistance Grants program into a competitive grant program in which North Dakota would be not be guaranteed funding. North Dakota received $1.13 million in FY07 to fight the meth epidemic. The President's Budget also eliminates the COPS program, though it proposes a nominal amount of funding for similar activities in another part of the budget. North Dakota received $5.22 million in COPS funding in FY07 to improve law enforcement technology and fight meth. The President's Budget also decreases funding for High Intensity Drug Trafficking Areas by $30 million. North Dakota received more than $500,000 in FY07 to fight methamphetamine and other drugs through the High Intensity Drug Trafficking Areas program. Transportation Amtrak is cut from $1.3 billion in FY08 to a proposed $800 million in FY09. At this funding level, long distance routes, like the Empire Builder, would likely be eliminated. Last year, in excess of 100,000 passengers traveled to or from North Dakota on Amtrak's Empire Builder route. The President's budget proposes cutting $75 million from Essential Air Service. EAS supported 21,827 enplanements in North Dakota in 2007. Veterans The Bush budget recommends a modest increase of $1.6 billion for discretionary veterans' programs, which includes veterans' medical services in FY09. However, as in past years, the budget also includes annual enrollment fees and an increase in the prescription co-payment for medications for veterans. The budget increases fees on veterans for their health care by $5.2 billion over the next ten years. After 2009, the Bush budget is forecast to actually cut discretionary veterans' programs. Water The Bush Administration proposes, a 67 percent cut from the FY08 level of $67.9 million for Garrison Diversion projects. You have received this e-mail because you have signed up for Budget Issue Updates. If you do not want to receive future updates, you can remove yourself from this mailing list by visiting my Web page at http://conrad.senate.gov/issues/signup.cfm. Please feel free to forward this e-mail to others who you think would be interested in this information. 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